Japan’s financial regulator, the Financial Services Agency (FSA), has opened public consultation on the new rules that will decide which bond Stablecoin issuers can be used as reserves. The consultation is open until Feb 27, 2026, and the final rules will apply to all regulated yen-backed stablecoins issued in Japan.
In 2025, Japan updates its Payment Service ACT that allows the stablecoins to be issued under trust structures, but it did not clearly specify on what assets the issuers must hold as reserves. The FSA is now addressing the gap to protect users and to ensure stablecoins are fully backed by safe assets.
Stricter rules set by Japan
Under the draft rules, Stablecoin reserves may include certain foreign-issued bonds, but only if they meet the strict conditions. The bonds must have very strong credit ratings, and the issuing country should be big with atleast $648 billion in bonds outstanding. These rules apply to the stablecoins issued through trust-based structures where reserve assets are hold seperately and managed by the users. The new standard clearly defines how those reserves can be invested, ensuring transparency and safety.
The FSA also issued new supervisory guidance for the banks, insurance companies, and their subsidiaries that offer crypto services. A new requirement stated that the company must clearly explain risks to the customers. The aim is to prevent customers from assuming crypto products are risk-free just because they are offered by well-known financial institutions.
The companies that want to handle foreign-issued stablecoins in Japan must explain that the foreign user will not issue or promote the stablecoin to the general public in Japan. The FSA will also work with the overseas regulators to share information and monitor these assets more closely.
These changes are part of the Japans broader plan to build a safe and regulated stablecoin ecosystem. In October, fintech JPYC launched Japan’s first legally recognized yen-backed stablecoins, and Japan’s three biggest banks, MUFG, SMBC, and Mizuho, have launched stablecoins and tokenized deposit pilot programs. The FSA officially supported these efforts in December.
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